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Mergers I'd like to see -- Weight Watchers (WTW) and Godiva (CPB)

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a box of Oreos and a glass of milk, these two were meant for one another.

One aspect of American life that has been keeping up with the Dow Jones average is our waistlines. Since 1994, the percentage of adults considered overweight or obese has shot up from 55.8% to 65.9%, a bullish market (covered in barbecue sauce) indeed. In looking for partners that feed in this trough, I found two that, if merged, could make dough in both expanding and contracting economies.

The first, the obvious, is Weight Watchers International (NYSE: WTW). One of the oldest, and arguably the most successful weight loss company, Weight Watchers leverages peer- to-peer support to sell a full line of diet foods, books about weight loss and endorsed products. While its diet plan finished higher than those of other companies such as Jenny Craig in a Consumer Reports study, the fact is most customers don't succeed in maintaining their weight loss.

Continue reading Mergers I'd like to see -- Weight Watchers (WTW) and Godiva (CPB)

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Last updated: November 27, 2009: 09:52 AM

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